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For an industry that was already struggling under the weight of fee compression, slowing asset growth, and regulation creep, asset managers must now cope with added operational strain amid lackluster fundraising. Already on the profit margin ropes with worsening valuations, many firms were in a cost-cutting mode before the COVID-19 pandemic struck, making the challenge of responding to the crisis even more difficult. Emerging from the crisis successfully will test the resilience of every asset manager and challenge their assumptions about how to best allocate resources as the industry recovers.
While we are not yet on the other side of this crisis, it has become clear that the world is going to look different when we get there. COVID-19 has been a massive catalyst for change, accelerating trends that have been emerging for several years. The typical approaches to building new partnerships and reinforcing current relationships through in-person and face-to-face interaction don’t work during a pandemic. And, as a result of changing attitudes and behaviors, they are likely to be less effective after the pandemic.
Asset Managers Must Now Compete in a Digital World
Firms that spend this time building personalized, end-to-end digital strategies are more likely to emerge with a significant competitive advantage over those that are merely adapting their live event strategies to virtual ones. For example, rather than looking at virtual events such as webinars, podcasts, and social media as secondary methods to live events, firms now need to bake them into the DNA of their business. As people become more comfortable building relationships from afar, firms must be able to build trust digitally through increased personalized connectivity.
The bottom line is that a post-COVID digital transformation is no longer just a “nice-to-have” for asset managers; it is a “must-have” just to stay competitive. In preparing for a post-COVID era, firms will need to rethink what technologies they really need, which ones can reduce costs, and which ones can lead their transformation.
This is how asset management firms should be allocating their marketing resources right now.
Fully embrace digital channels
While stuck at home, investors and their advisors have come to embrace digital channels. Even traditionally reluctant institutional investors are now more accustomed to utilizing virtual tools and materials to make investment decisions. Asset managers who more broadly use digital, video, and audio channels will be able to reach and engage with their target markets much more efficiently.
Build a digital intelligence infrastructure to create personalized interactions
In times like these, it is more essential than ever for marketers to view their target market as individuals and not group them into broad segments. By utilizing real-time engagement data mined from their CRM, websites, and social media, asset managers can create a record of all that is knowable about a client or prospect – i.e., who they are, their interests, their online behavior – to assist them in creating informed interactions. Through these personalized insights, targets can receive relevant and valued information for a positive and unique engagement. The same intelligence can be used to create sales process flows that can be monitored and measured to drive more qualified leads in the funnel.
Also, data analytics will help asset managers better understand their customers so they can align products, pricing, and financial data more closely to facilitate the smooth flow of information to their product development and sales functions. The sales and marketing functions can act more collaboratively to create the support that drives sales.
Content for differentiation
As digital marketing becomes more prevalent in the asset management industry, the proliferation of digital roadshows, webinars, and virtual fund presentations will make it more difficult for fund managers to standout. To be meaningful and of value, your content has to be able to break through the noise as a differentiator in a sea of mundane content.
In a digitally wired world, the only way to be visible and engage with a targeted audience is through highly insightful content that has a unique voice, counters conventional wisdom, and has something compelling to say – in other words, real thought leadership.
Outsource technology solutions
Digital marketing technology is now a necessary cost for asset managers, but it will reduce overall costs by streamlining processes and creating operational efficiencies. By outsourcing technology solutions, smaller firms can control their technology costs while benefiting from the scale of a digital technology provider.
For many asset management firms, making a post-COVID digital transformation will be the most significant investment of time and resources they will ever make. But their marketing ROI will be much more apparent and measurable than with traditional marketing methods. More significantly, a well-conceived digital marketing strategy can empower even the smallest asset manager. Whereas small firms could never compete with larger firms with huge roadshow budgets, a well planned and executed digital marketing strategy can level the playing field, enabling them to compete directly with firms with extensive digital marketing experience.